10 May 2010

Chrysler to Reward Dealers

The Wall Street Journal

DETROIT—Chrysler Group LLC plans to reward about three-quarters of its dealers with financial payouts of as much as $200,000 under a new program geared toward boosting customer satisfaction.

About 1,750 dealers will receive an electronic cash payment under the "Dealers Standards" program initiated by Chief Executive Sergio Marchionne. The rewards, to be paid out over the next week, range from $1,500 to $200,000, with the national average of $12,200.

Dealers were evaluated on the operation of their stores and customer care by Chrysler and three outside firms hired by the auto maker. The outside firms used mystery shoppers and official appointments.

"Our emphasis this time around was much more on customer care but the focus will continue to change throughout the year," said a Chrysler spokeswoman. Dealers will be notified of the results during a conference call later Friday.

The program is another step Marchionne is making to entice dealers to boost their efforts as he attempts to revive the struggling auto maker. Mr. Marchionne runs a similar program within Fiat SpA where he also serves as CEO.

The payouts also come as Chrysler's arbitration process to drop dealers from its network intensifies. About 250 dealers are pursuing arbitration to rejoin the network after Chrysler decided last year to stop supplying 789 dealers with new vehicles as part of its bankruptcy process.

Congress later mandated Chrysler to engage in arbitration before cutting the dealers. Chrysler has won three out of four cases in which a decision was rendered through Friday. More than 50 hearings in states throughout the country are scheduled to take place next week.

Deland Dodge, in Deland, Fla., won its case earlier this week. It is now waiting for Chrysler to finalize details and begin shipping vehicles. "I think in their selection of the 789 dealers there had to be a mistake in who they terminated," said owner Gil Dannehower about why he fought to rejoin the network.

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